Pandemic rental assistance upended conventional wisdom on housing. What happens when it runs out?

When Susan Brewer’s wife lost her job during the pandemic, her family, living on the South Side of Chicago, fell behind on rent. Brewer had been supplementing her wife’s salary with the disability income she received from Social Security, but on its own it wasn’t enough to pay their bills.

In December 2021, Chicago opened up a new round of applications for renters needing emergency aid. But Brewer’s landlord — who was then threatening them with eviction —wasn’t interested. Normally, that would have been the end of it: If a landlord refuses to participate in a government program, their tenants won’t get help. But in this case, Brewer was able to apply for and receive the money directly. She picked up her check from City Hall, paid off all her outstanding rental debt, and her wife eventually got her job back.

“Becoming homeless was one of my greatest fears,” she recalled. “I’m 64 years old. I can’t be out in the streets. I’m still struggling to get the weight back I lost from all that stress.”

Brewer was able to stay in her home because, about a year before she got her aid, the federal government had taken an unprecedented step: It decided to help people at risk of eviction stay in their homes. The Emergency Rental Assistance Program — or ERAP — marked a fundamental departure from virtually all previous housing aid programs. Tenants could get money directly, the eligibility process was streamlined, and the categories of people who qualified were intentionally broad.

Nearly 1 million people are evicted in the US each year, mostly for nonpayment of rent. Between 2000 and 2016, according to the Eviction Lab at Princeton University, one in 40 American renter households was evicted, and more than twice that share were threatened with it. The experience of losing one’s home to eviction has been linked to all sorts of adverse consequences, including higher job loss, debt, suicide, and reduced credit access.

Many evicted families are forced to relocate to lower-quality homes in neighborhoods with more crime. Evicted children experience higher food insecurity and lower academic achievement than other low-income kids living in rental housing, partly as a result of having to shuffle between schools and their parents’ declining mental health.

But even as research mounted on the prevalence and harms of eviction, the federal government did little to help families avoid it. “Before the pandemic, evictions were happening and there was a crisis, but we weren’t thinking about federal intervention in that space in a real way,” acknowledged Peggy Bailey, the senior adviser on rental assistance at the US Department of Housing and Urban Development. The federal government would sometimes take action if the eviction violated the Fair Housing Act, but not otherwise.

The situation changed only when the pandemic hit, and orders to “stay at home” grew louder and more urgent. You can’t stay at home if you lose your home.

Initially plagued by bureaucratic hurdles, the rental assistance program eventually succeeded in reducing evictions. Although twice as many renters reported being behind on rent in mid-2021 compared to pre-pandemic times, eviction levels remained well below historic averages by the end of the year. They did not rebound to expected levels even after the Supreme Court struck down the CDC’s federal eviction moratorium. The money also largely reached the vulnerable tenants it was intended to help. Among those renters, researchers have found, the experiment was associated with a host of benefits, including less debt and physical stress.

But now, as federal ERAP dollars dry up, evictions are beginning to climb again.

The country faces a pivotal choice to build on what communities have learned. Before the pandemic, almost 8 million renters spent more than half of their incomes on housing. With more funding, the government could create a permanent program to help those who, living paycheck to paycheck, might need emergency assistance to cover temporary shortfalls on rent. A bipartisan bill in the Senate would do just that.

“What we know now from ERAP is that we can play a role in preventing evictions due to nonpayment of rent,” Bailey said. “Just a little bit of housing assistance can go a long way to saving money and a lot of aggravation for families.”

“We put a lot of effort into building the [rental assistance] plane while we were flying,” added Dave Thomas, the president of the Philadelphia Housing Development Corporation. “And now that it’s built, we have to figure out: Does it last, or was it a lot of energy for nothing?”

The federal CARES Act from March 2020 included money that states and cities could use to assist renters. But it was in December 2020 that Congress authorized $25 billion for its first initiative dedicated exclusively to helping renters stay in their homes. A second round of funding in March 2021 brought Congress’s total ERAP spending to $46.5 billion.

The money was directed to states and localities to distribute to newly created rental assistance programs. These built-from-scratch, decentralized programs, which number over 500 today, had varying rules and requirements for tenants and landlords to apply. Natasha Leonard, a housing specialist with the National League of Cities, said much of her work during the pandemic was spent trying to spread awareness about what other cities were doing for rental assistance. For months, the program was blasted for administrative hangups, shifting and confusing guidelines, and sending money to renters too slowly.

ERAP was administered by the Treasury Department, not the Department of Housing and Urban Development. HUD has more experience developing targeted funding formulas, but Treasury has experience sending money out quickly. It also exists outside of the traditional federal housing bureaucracy, so some leaders felt it was better positioned to innovate and take risks.

Over time, Treasury did innovate. It loosened ERAP rules and clarified its expectations. Jurisdictions scrambled for new technology and staff and for nonprofit partners to help spread awareness among eligible renters.

In 2021, 3.8 million payments were distributed to eligible households. By April of this year, per a Treasury spokesperson, that number had reached 5.7 million. In all, more than $30 billion in assistance has been distributed or obligated, and the remaining money is expected to be spent in the next few months. Activists and reporters are now warning of the funds running out too quickly.

Researchers have found that, by and large, the funds went primarily to communities hit hardest by the economic impacts of the pandemic — places with steeper job losses, higher shares of renter households, and more residents of color. Treasury data published in late February reported that over 80 percent of program funds went to very low-income households, defined as those earning 50 percent or less of area median income, and primarily reached Black, Latino, and female-headed households.

“It was unlike anything — and at a scale unlike anything — we’ve seen in our lifetime,” said Greg Heller, a former Philadelphia Housing Development Corporation official who helped lead the aid distribution for his city.

Claudia Aiken, a policy researcher at the University of Pennsylvania, has already found clear results from Philadelphia. Receiving emergency rental assistance was associated with a lower likelihood of incurring debt, a lower share of tenants reporting that they worried frequently, and a significant decrease in the amount of rent owed among those behind on payments. Other studies on preliminary impacts in Atlanta and Baltimore have found receiving rental aid is associated with reduced risk of homelessness and lower debt.

As states and cities cobbled together their rental assistance programs, policymakers quickly ran into several issues. Landlords weren’t always eager to participate because accepting the money sometimes came with requirements to forgive past penalties, interest, and court costs; or because participating barred landlords from chasing payments for anything outstanding in the months they received aid. Some states capped available rental assistance so low that many landlords saw accepting it as consenting to de facto rent cancellation while they were dealing with their own cash flow problems.

Some programs tried to grease the wheels to induce more participation. A Pennsylvania rental assistance program in place before ERAP launched had a monthly cap of $750, regardless of what rent was owed. But only 44 percent of landlords participated, so Philadelphia policymakers decided to pair state aid with CARES money to offer landlords up to $1,500 per month. This boosted Philadelphia participation to 63 percent.

Still, many landlords just wouldn’t bite. In a national survey of rental assistance programs conducted in spring 2021, 44 percent of program administrators said landlord responsiveness was a challenge. That number rose to 67 percent in summer 2021, and 74 percent in late 2021. As one ERAP administrator explained, “many landlords are not looking to keep unreliable tenants; some refuse to work with us; [and] others are not willing to renew leases.”

Landlord resistance is nothing new in federal housing policy. But to address the issue, Treasury took an unprecedented step. It said that programs must send money directly to tenants when their landlords don’t cooperate, and clarified that programs can even provide direct assistance to tenants before trying to engage the landlord. Not all programs embraced the idea, but many did.

“ERAP operated under the idea that we should help everyone who has a need, and that’s just a radical departure and mindset from our other existing housing programs,” said Aiken.

ERAP’s goal to assist needy tenants was so explicit, and so unlike any past federal program, that Treasury officials even clarified that aid should be delivered to anyone experiencing hardship during the pandemic, not just due to Covid-19.

Federal policymakers have contemplated the idea of distributing rent money directly to tenants, but they’ve only really tried it once before, via a small program that ran in a dozen cities in the 1970s.

“Tenants are the program’s primary beneficiaries,” explained Noel Poyo, the deputy assistant secretary for community economic development at Treasury, who led the department’s implementation of ERAP. “It is a low-income household that meets these tests. The program doesn’t exclude tenants with landlords who don’t want to participate.”

Another defining characteristic of the program was its gradual embrace of unusual strategies to get money out the door. In distributing public funds, governments have an obligation to ensure that the dollars really get to those who need them. But fraud mitigation can go too far, requiring so many bureaucratic hurdles that the aid never reaches those it was meant to help.

Some ERAP programs took dramatic steps to cut down on paperwork. Instead of submitting official records, people could simply affirm, under penalty of perjury, details of their personal circumstances, like their income or address. Administrators were also allowed to verify income by cross-referencing applicants’ statements with other population-level data in the same geographic region.

Others embraced “categorical eligibility”: the idea that if you qualify for one existing welfare program, and that program verified your personal details, then you should be considered automatically eligible for another. Researchers found that programs with fewer and more flexible requirements were able to distribute their rental assistance funds faster.

Watchdogs have thus far produced little evidence of fraud. Eight months into California’s pandemic rental assistance program, housing officials identified 1,800 fraudulent applications out of nearly 500,000 — or 0.0036 percent — and none of those applications were paid. California officials explained they had learned a lot about detecting fraud after the state’s costly unemployment fraud debacle. Other states that disclosed data — such as Utah, Arizona, and New York — reported virtually no rental assistance abuse, either. In Montgomery County, Maryland, auditors wrote in October, “We ultimately found no specific instances of fraud,” though they acknowledged that self-attestation made it difficult for them to discern who might be lying.

In February, federal auditors with the Government Accountability Office warned Congress that they did not think Treasury had implemented enough monitoring controls for its ERAP program, and stressed fraud was a risk. A spokesperson for Treasury said all ERAP grantees must have in place procedures to prevent, investigate, and address fraud. Rich Delmar, deputy inspector general of the Department of the Treasury, the division responsible for oversight, could not provide specifics on ERAP fraud allegations, but said when they receive tips of abuse through their hotline, they investigate them.

Even with Treasury’s encouragement, some local administrators resisted easing up on their program requirements, fearful of the potential for scandal or backlash.

But Poyo, from Treasury, said that ERAP demonstrated governments could reduce unnecessary barriers to aid while still using identity verification tools to evaluate applications. “It is not a zero-sum game between supporting access for vulnerable populations and ensuring strong program integrity,” he said.

ERAP was clunky at times. Local program leaders said the continually shifting Treasury guidance made distributing money more challenging, as did the IT demands and lack of qualified staff and volunteers. It took time to build up coordination with local court systems that handled evictions, too.

“There was a perception at first that if you just dump loads and loads of money that local governments should have some way of getting it out,” said Heller. “But to get hundreds of millions of dollars — in Philadelphia, we had over $250 million — requires a huge amount of infrastructure, a lot of IT backbone, a lot of training.”

While the program overall did a good job reaching needy areas, some struggled more than others. Elizabeth Kneebone, the research director for the Terner Center for Housing Innovation at UC Berkeley, has been studying communities that were more readily able to deploy this federal assistance, which tended to be denser urban areas. Suburbs and rural communities — with fewer nonprofits, diminished or nonexistent local media, and less institutional capacity in their local governments — tended to have a harder time, even as the need for help persisted.

“With the suburbanization of poverty, we need to ask, how do we make these areas more flexible and responsive to the ways needs can change?” Kneebone said.

Experts and policymakers say they are not exactly sure what happens now. Federal funds are drying up and most programs are no longer accepting new applicants. Researchers are continuing to publish new reports on ERAP lessons learned.

There is a consensus among housing leaders that the next year will be critical in determining whether all this pandemic-era knowledge is sustained and expanded upon, or buried and forgotten.

The National Low Income Housing Coalition, an advocacy group, is focusing on rising eviction rates and the need to establish a permanent emergency rental assistance program, said Sarah Gallagher, the group’s senior project director. “We need it both for individuals in emergency situations because of personal crisis, as well as to prepare for another pandemic,” she said.

If Congress was planning to reallocate new dollars, then local officials would work to invest in infrastructure and staff, just like they do for other permanent housing programs. But at this point, communities don’t know if they’ll be using their ERAP systems again, or be forced to dismantle them.

Meanwhile, HUD is now considering an eviction prevention strategy and is beginning to think through how to start tracking eviction data nationally. In recent federal appropriations acts, Congress tasked the housing agency with considering the feasibility of developing some sort of national eviction database, and three bills have been introduced to increase federal analysis of evictions.

“I think you can make an extremely strong defense that investing in eviction prevention provides a positive economic and social return to the country,” said Gene Sperling, the American Rescue Plan coordinator for the Biden administration. “So even on that hard-headed basis, eviction strategy is the type of wise investment that people think of like quality preschool — especially when you consider the economic scarring, emotional trauma, and heartbreak these policies can prevent.”

The uncertainty surrounding future funding makes this all particularly confusing for local housing leaders. Right now, some communities are still distributing their ERAP funding, which doesn’t expire until September 2025. Localities are also tapping into remaining state and local recovery funds to help sustain their programs.

But these funding streams will, eventually, be gone. On the congressional level, there’s a bill to establish a permanent Emergency Assistance Program. While its proposed $3 billion in annual funding is fairly low, housing advocates say passing the legislation would be an important seed that could help motivate HUD to continue building on ERAP lessons. For now, though, passage looks unlikely.

In the meantime, activists are fighting to press for broader reforms to the housing market.

Gallagher suggested making ERAP recipients automatically eligible for other programs through categorical eligibility. “Some of the households that received ERAP are in need of longer-term subsidies, and now that households have been engaged, we don’t just want to walk away,” she said. “We’ve already deemed them eligible, there should be a way to transition those folks to additional resources, using self-attestation.”

Bailey, from HUD, noted it was her agency that first encouraged Treasury to consider self-attestation as a strategy because HUD knew from experience how hard it can be for homeless populations to receive government assistance when they lack certain documents. She acknowledged, though, that currently no HUD programs, including even its own homeless assistance programs, allow for that flexibility.

Some communities, like Philadelphia and Chicago, have used their ERAP dollars to bolster adjacent housing assistance efforts, like expanding access to lawyers for low-income tenants and encouraging alternatives to eviction through so-called court diversion programs. The White House is encouraging these kinds of efforts and held a summit on court diversion in the summer of 2021, something Sperling said was done partly to accelerate a conversation around long-term eviction reform.

While federal funds certainly enabled Philadelphia and Chicago to run more successful diversion programs (landlords are much more likely to agree to an eviction alternative if there is money available to pay them rent) local leaders say they don’t plan to abandon their diversion efforts even if ERAP dollars dry up. “As our resources have diminished, we’ve tried to be a little more intentional ... and do a little more targeting,” said Thomas, of the Philadelphia Housing Development Corporation.

“We used $8 million of our ERAP funds to launch a right-to-counsel pilot because we want this to be not a one-time emergency measure, but to help create infrastructure that can be lasting,” said Daniel Kay Hertz, the director of policy with the Chicago Department of Housing.

“The primary crisis we have now is how many people continue to need assistance, and not having enough money for them,” he added. “But the secondary crisis is that Chicago and dozens or hundreds of jurisdictions gained an enormous amount of administrative capacity to do a direct relief program, and we aren’t sure yet what that will mean.”